Congress grills tech firms over China dealings

Four tech companies go head-to-head with Congress on the China situation. …

As expected, there was a great rattling of heads up on Capitol Hill today as two subcommittees of the House Committee on International Relations finally got to meet with representatives from Google, Yahoo, Microsoft, and Cisco to discuss the activities of their respective companies in China. Given the amount of press the companies have gotten lately, no one in Congress is likely to cut them any slack. As long as the US remains a democracy in more than name, it is up to our legislators to examine the policies of corporations based here and make sure they conform to... um, what exactly?

That's the problem. Following a well-blazed trail across the Pacific, these American companies have opted to do business with China. Given the combination of China's sheer size and repressive government, the situation is as complex as any in the world today. Some believe that China represents a new opportunity and market for American goods and know-how. Some believe that it represents a loss of jobs and a huge trade deficit, and some have compared playing by China's rules to ratting out Anne Frank in Nazi Germany...

"If the secret police a half century ago asked where Anne Frank was hiding, would the correct answer be to hand over the information in order to comply with local laws?" [US Rep. Chris] Smith (R-NJ) asked. "We must stand with the oppressed, not the oppressors."

And so it was that reps from four of our largest tech companies found themselves being grilled over an open flame as they attempted to defend policies that have brought them a heavy dose of criticism.

For their part, the tech companies all held firm to a similar argument: China is better off with them than without them, and for them to do business with China, they must play by her rules.

Elliot Schrage, vice president of global communications and public affairs for Google, said Google's decision to censor its Chinese Internet search engine was "not something we did enthusiastically or something we're proud of at all. ... We have begun a path that we believe will ultimately benefit our users in China."

Microsoft's associate general counsel, Jack Krumholtz, said his company was committed to staying in China because of the Internet's potential for eventually allowing free access to information. "We think the benefits far outweigh the downside, in terms of promoting freedom of expression," he said.

Are they right? That's hard to guess. We all know that these companies stand to make quite a bit of money by playing ball with the Chinese government. Standing up for what you believe in becomes a lot more difficult when your stockholders are wondering where their profits are. It's certainly possible that the oppressed population of China will see a higher upside from a castrated Google search than one run by the People's government. That's hard fact to take in however, as the iconic Tiananmen Square image of a protester staring down a tank takes on new significance in his absence from Google.cn.

Congressional legislators have promised to draft a bill that will make it much harder for tech companies to compromise their principles, either genuine or alleged.

The bill will include export controls on certain types of hardware and software and prohibit putting e-mail servers and other assets in countries that lack U.S.-style due process laws, Smith said.

"If a company allows itself — in its filtering capability — to filter terms such as 'democracy' and 'religious freedom,' they will be in violation of U.S. law," Smith told Reuters regarding the proposed legislation.

Doing business across borders isn't that simple of course. A company that finds itself in violation of the law on one side or the other will have to tread carefully or end up in the middle of a legal and diplomatic miasma. Yahoo, at least, seems perfectly happy to step aside and let the governments duke it out.

Yahoo's senior vice president and general counsel, Michael Callahan, said his company was "very distressed" at having to comply with Chinese law.

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"Yahoo cannot take this ... on by itself," he said. "We ask for the government's help."

Not everyone agrees, of course. Harry Tsao, co-founder of Mezi Media—a company that does business in China, has a slightly different take on the topic.

It is hard to see anything constructive that will come out of these public discussions. U.S. Internet companies will spend more on government lobbying, and the Chinese government will view this as yet another attempt by the U.S. government to extract leverage on Chinese policies.

Sadly, Tsao's prediction is probably not far off. Highly publicized hearings that begin with a great deal of vim and vigor often degenerate a tangle of partisan bickering and special interest lobbying that results in very little. Yet China itself must feel that something is at stake in this matter, since they've chosen to take the offensive on a couple of different fronts. In a bit of news that is <sarcasm>almost certainly not related to anything we're discussing</sarcasm>, China chose today to release details of an item that—given China's history of copyright infringement—is sure to tickle the toes of the tech industry: a four-month-long crackdown that wrapped up in December and netted 172 cases of Internet piracy.

The National Copyright Administration meted out fines totaling 798,000 yuan ($98,000) to the operators of 29 violating Web sites and transferred 18 of the cases to the courts for criminal prosecution, Yan Xiaohong, deputy director of the administration, told reporters.

Meanwhile, in a novel display of moxie not seen since Enron in its heyday, China blamed us for its endorsement of censorship.

China is no different from Western nations like the US and Britain in the way it controls the internet, argued Mr Liu Zhengrong, deputy chief of the Internet Affairs Bureau of the State Council Information Office.

"After studying internet legislation in the West, I've found we basically have identical legislative objectives and principles," Mr Liu was quoted as telling the state-run China Daily newspaper on Tuesday.

"It is unfair and smacks of double standards when (foreigners) criticize China for deleting illegal and harmful messages, while it is legal for US websites to do so," he said.

There we stand, with both feet in it. Although freedom of speech on the Internet has been upheld in the US, repeated attempts at everything from blocking porn to government tracking of search habits and even torture allegations leaves us with little room to criticize, at least in the eyes of China.

While we here at Ars stand squarely on the side of promoting democracy and freedom of speech in both China and the US, the situation is exceedingly complex and promises to be unfolding for a long time. Perhaps the best thing we can take out of the entire matter is one of hope: the mere fact that strong discussions about censorship and freedom are taking place proves that we aren't too far gone. In a world which seems to become more of a goldfish bowl with each passing year, maintaining dialog and openness will be the key to not repeating the same mistakes, and creating a better future for citizens of both countries.